Do not take bankruptcy lightly, this is a serious thing. Before you file for personal bankruptcy, be sure that you understand all of the ramifications. The information below can guide you. You can always have an easier and better time navigating the treacherous waters ahead of you with the right research.
Exhaust every other option before making the decision to file for personal bankruptcy. You can also avail yourself of other options, such as consumer credit counseling. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. The lawyer representing you when you file needs to have full knowledge of your financial situation. Do not leave anything out and come up with smart plan to manage the situation you are dealing with.
Chapter 7
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. The Chapter 7 variety can help you eliminate your debts almost entirely. Your former ties with creditors will cease to exist. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Be sure to check out a number of lawyers so that you will find one who is just right for you.
If you are making more money than you owe, bankruptcy should not even be an option. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Interest Rate
Look at all the alternatives to bankruptcy before filing. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.
You may want to see if you can get lower payments on your vehicle if you want to keep it. Many times, payments can be lowered through Chapter 7 bankruptcy. The vehicle must have been obtained more than 90 days before filing and be a loan with high interest. You must also have consistent work history.
Keep the concept of shame out of your head if you are contemplating bankruptcy. The bankruptcy process makes people feel guilty and ashamed. These feelings can cause you to make rash decisions and cause psychological problems. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
Bankruptcy Lawyer
Because bankruptcy is such a challenging time that a great deal of stress, both mental and emotional, may be involved. You need to do your research to find a good bankruptcy lawyer. Don’t think that the highest priced attorney is the best. When it comes to choosing the right attorney, consider quality before cost. Ask people who have used a bankruptcy lawyer for referrals, look them up at your local Better Business Bureau, then schedule free consultations in order to interview them. You could even attend a court hearing to see how an attorney handles his case.
Before you file, make sure you understand the laws as much as possible. For instance, it’s prohibited for an individual to transfer assets to someone else a year before filing for bankruptcy. Also, a person cannot legally increase their debt amount on credit cards prior to filing.
Make sure you are aware of all your options before you file for bankruptcy. Credit counseling is one option you should consider. There are some good non-profit organizations that could help you. With their assistance, you can reduce the payments you have to make and even get some of the interest removed from your debts. You can even pay your creditors through them.
If you get a new job right before filing for personal bankruptcy, keep going with your initial plans to file. Bankruptcy could still be your best option. The timing of filing is a huge factor. Post your filing before you begin earning money at your new job. In this way, your repayment means will be determined using your income prior to your new employment.
As you have seen, filing for personal bankruptcy can be complicated. Do not get overwhelmed by the plethora of information available to you. Think carefully about your situation and the tips at hand. That way, you’ll make the best decisions.
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